OC Today-Dispatch APRIL 4, 2025
STUBBORNLY LOCAL, EQUALLY INDEPENDENT
Sign up now for our new, Monday-Friday newsletter. — Page 65
PRICELESS
Good news bad news: OC tax rate stays same Year-round homeowners won’t see any change in their tax bills, but those who own commercial property or are nonresident property owners are likely to see some increases as reassessments take effect. — PAGE 4 BRIAN SHANE/OC TODAY-DISPATCH
ARCH DELUXE Crews work to renovate the iconic Boardwalk Arch at North Division Street on April 1. The structure is slated for a fresh paint job and updated lettering by the start of the summer season.
AGH Corp. County: audit schools, not us OKs merger The county commissioners say yes to a state audit of the Worcester County Board of Education to ensure that it is safeguarding assets. But when a motion is made to do the same with county government, the commissioners unanimously say no. — PAGE 18, 20
Members give strong endorsement of plans to join TidalHealth system. — PAGE 10
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OC Today-Dispatch
APRIL 4, 2025
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OC Today-Dispatch
Ocean City proposes $181M budget for coming fiscal year By Bethany Hooper Associate Editor (April 4, 2025) City officials this week began their review of a $181 million budget for the coming fiscal year. On Monday, City Manager Terry McGean and Budget Director Jennie Knapp presented the Ocean City Council with the proposed budget for fiscal year 2026. The draft spending plan for all funds totals $181,875,671, with the general fund making up nearly $120 million. “This year’s challenge is recruiting and retaining a high-quality, full-time workforce, particularly in the police department,” McGean said this week. “Therefore, my direction to the departments for budget preparation was that they should focus on taking care of our existing employees, our existing equipment, and existing facilities.” The fiscal year 2026 budget proposes to keep the property tax rate at 44.26 cents per $100 of assessed value. The estimated additional revenue brought in from that rate, McGean said, would be used to cover a $5.7 million increase in general fund expenditures. “Of that increase, 32% is attributable to the cost of the city’s current offer to the Fraternal Order of Police in the ongoing collective bargaining negotiations, and it includes the first year of a threeyear program to equip all full-time officers with a take-home vehicle,” he said. “An additional 21% covers pay increases for all other employees. The other significant increase in the general fund budget is related to the transportation division. The loss of revenue from tram operations and increased cost-share percentages in grant funding due to state cutbacks have increased the contribution from the general fund to the transportation fund by approximately $1.5 million.” McGean noted the budget also included funding for five new full-time positions, which would cost the city $398,000 in the coming fiscal year. Those positions, he added, were created from issues that arose in various departments over the last 12 months. “Three positions are related to the previously approved new rental license inspection program and are fully funded by short-term rental license fees, one is an administrative associate for the fire department to handle increased administrative duties associated with the growth of that department, and one is for a shop foreman in the service center,” he explained. McGean added the city’s efforts to restrict the budget also carried into its payas-you-go projects. He said the capital project list focused on maintaining existing facilities. “It includes street paving, canal dredging, storm drain cleaning, Boardwalk maintenance, replacing the playground and renovations to city hall and the Worcester Street comfort station,”
he said. City officials noted that property taxes would bring in an additional $5.7 million in revenue, while new parking rates would bring in an additional $900,000 in revenue. That increase, McGean said, would allow the city to reduce its reliance on the fund balance for everything except a playground replacement and a take-home police vehicle program. “Maintaining a healthy fund balance is crucial in protecting our bond rating,” he said. McGean noted the city’s fund balance as of June 30, 2024 included $17.9 million in assigned funds and $24.2 million in unassigned funds. However, after money is set aside for various reserves, he said the city was left with a true unassigned fund balance of $2.5 million. “Often we get comments regarding the large amount of fund balance,” he explained. “But when you look at what is truly unassigned and available, it’s $2.5 million, not $42 million.” McGean said the city’s budget has grown in the last decade, with public safety being the driving force. He also noted that in the last 20 years, the city has relied less on property tax and service charges and more on room tax and prior year reserves. “Using prior year reserves to balance the budget is not sustainable,” he said. “As noted, the FY26 budget looks to reverse that trend by increasing user fees and reducing reliance on our prior year reserves, from approximately 4% to 1.5%.” During a more detailed presentation Monday, Knapp noted that general fund revenues were estimated to increase $8.48 million, but that the use of fund balance would decrease $2.8 million, resulting in a nearly $5.7 million net increase in general fund revenues. On the expense side, Knapp said funds were budgeted for new positions, step increases and cost-of-living adjustments (COLA). She added that the city would not need to contribute to its other post-employment benefits (OPEB) plan in the coming year, as it was funded at nearly 120%. Knapp said the spending plan also incorporated a step increase and 8% COLA for the police union, as well as a take-home vehicle program. That offer, she said, would have a total impact of $1.8 million on the city’s general fund. Knapp on Monday also highlighted the city’s six enterprise funds, three of which would require a general fund contribution in the coming year. The city will make a $320,159 general fund contribution to the airport fund, a $2.4 million contribution to the convention center fund, and a $2.6 million contribution to the transportation fund. Officials met over the course of the week to review spending plans for each of the city’s departments. The fiscal year 2026 budget takes effect July 1.
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